On Wednesday, April 27, 2022, Qualcomm QCOM, the world's leading wireless technology innovator, announced its fiscal 2022 second quarter financial results for the fiscal year ended March 27, 2022 after hours in the U.S. stock market, and the fiscal second quarter revenue and fiscal third quarter performance outlook exceeded analysts' expectations, which is also the sixth consecutive quarter of revenue exceeding expectations, mainly due to the growth of its four major chip markets.
Qualcomm U.S. stocks closed up 1.2 percent on Wednesday, boosted by positive earnings, and rose 8.0 percent at one point after hours. Year-to-date, Qualcomm has fallen by about 27%.
Specifically, look at the core financial data:
Adjusted EPS for the fiscal second quarter was $3.21, compared with analysts' expectations of $2.93, up 69% year-over-year.
Adjusted revenue for the fiscal second quarter was $11.16 billion, compared with analysts' expectations of $10.6 billion, up 41 percent year-over-year.
Adjusted EPS for the fiscal third quarter is expected to be $2.75-2.95, and analysts expect $2.60.
Fiscal third-quarter sales are expected at $10.9 billion, and analysts expect $9.98 billion.
Specific sub-business points of view:
The chip business QCT reported sales of $9.55 billion, compared with analysts' expectations of $8.86 billion, up 52% year-over-year.
QTL, the technology licensing division, reported revenue of $1.58 billion, compared with analysts' expectations of $1.55 billion, down 2% year-over-year.
Most of Qualcomm's revenue comes from selling processors and modems for smartphones, as well as technology that connects to cellular networks through licensing. Its strong results on Wednesday came amid broader skepticism among the market about chip companies in 2022 that benefited from strong demand and limited supply during the pandemic.
Led by CEO Cristiano Amon, Qualcomm emphasized to investors that it could become a chip supplier to many other broad markets and could diversify from its handset chip business.
The earnings report shows that Qualcomm's four major chip markets have all grown.
Mobile phone chip sales, its largest market, grew 56 percent annually to $6.33 billion, suggesting that the slowdown in smartphone growth has not yet affected its core business in an inflationary environment.
The RF front-end segment, which focuses on chips needed for wireless connectivity, grew 28 percent to $1.16 billion.
Automotive chip sales also rose 41 percent to $339 million, and while its sales in the automotive market segment are relatively small at the moment, Qualcomm believes that partnerships with automakers and suppliers will further drive growth (excluding revenue from Veoneer, which completed its acquisition this quarter).
The IoT segment, which focuses on low-power, low-cost chips, saw sales rise 61 percent to $1.72 billion.
In addition, Qualcomm said it paid a cash dividend of $764 million in the quarter and repurchased $951 million worth of shares.
Last October, Qualcomm reached a definitive agreement with investment firm SSW Partners to acquire Veoneer for $37 per share (total consideration of about $4.5 billion). After the deal closes, SSW will sell Veoneer's self-driving software business, Arriver, to Qualcomm and look for buyers for Veoneer's other businesses.
In April, Qualcomm announced that it had completed its acquisition of Arriver from SW Partners, enhancing Qualcomm Technologies' ability to provide competitive, open, fully integrated advanced driver assistance system ADAS solutions at scale for automakers and Tier 1 suppliers.
Upon completion of the acquisition, Qualcomm Technologies will consolidate Arriver's computer vision, driving strategy and driver assistance assets into its portfolio of leading Snapdragon Ride platforms, building on its previous partnership with Arriver. The Snapdragon Ride platform is a complete portfolio of high-performance central computing and vision system solutions, featuring the Snapdragon SoC and accelerator product family to meet the growing demand for scalable and scalable integrated software SoCs in the automotive ecosystem in the area of functional safety. In addition to being scalable to support a wide range of car types, the modular nature of the Snapdragon Ride platform gives automakers great flexibility to take full advantage of the software capabilities they develop.